Marketing operations 'cut back' due to recession

Marketing operations across the board have been cut back as a result of the global economic crisis, according to one industry observer.

A survey by accountancy firm Kingston Smith showed both profit margins and productivity have fallen in the majority of promotions sectors, as budgets are pared back in order to meet new austerity requirements, reports Marketing Week.

In marketing operations, net productivity fell by one per cent when compared with figures for December 2009.

This may indicate tough working conditions for brand enhancement experts, either due to increased competition from rival firms, or because individuals are less willing to part with their money.

Despite the slight drop in output, some marketing operations arms performed well, with public relations (PR) teams among the best at protecting profit.

The survey revealed PR agencies spent more than half their income on staff (59.3 percent), yet still managed to secure margins of 15.2 percent.

This was due to stricter controls on outgoings, which may have eliminated wasted expenditure.

Such an approach could signal to other marketing operation groups the importance of examining expenses, rather than taking a blanket approach to chopping budgets.

Kingston Smith offers advice to clients on how to consolidate and expand business activity.

It recommended a target of gross income per head for marketing professionals at £100,000, to provide optimum performance.

The actual figure for the period in question was £106,000 per person, based on analysis of more than 200 company accounts.

Those considering modifying marketing operations may wish to examine successful tactics and focus on the aspects that make them function well, in order to improve the cost-effectiveness of existing and future promotional drives.